Rural and Regional Adjustment (Drought-related Assistance Schemes) Amendment Regulation 2022

1Short title

This regulation may be cited as the Rural and Regional Adjustment (Drought-related Assistance Schemes) Amendment Regulation 2022.

2Regulation amended

This regulation amends the Rural and Regional Adjustment Regulation 2011.

3Amendment of s 3 (Approval of schemes—Act, s 11)

Section 3(1), ‘39’—
omit, insert—

40

4Insertion of new pt 4, div 13

Part 4—
insert—

Division 13 Transitional provision for Rural and Regional Adjustment (Drought-related Assistance Schemes) Amendment Regulation 2022

20Existing applications for assistance

(1)This section applies if, before the commencement, an application for assistance under the scheme set out in schedule 39 was made but not decided.

(2)Schedule 39, as amended by the Rural and Regional Adjustment (Drought-related Assistance Schemes) Amendment Regulation 2022, applies to the application.

5Replacement of schs 4 and 5

Schedules 4 and 5—
omit, insert—

Schedule 4 Drought carry-on finance loan scheme

section 3(1)

Part 1 Preliminary

1Objective of scheme

The objective of the scheme is to assist sole traders, partnerships, proprietary companies and trusts, that are carrying on primary production enterprises that have been significantly financially affected by drought, with carry-on finance.

2Purpose of assistance

(1)The purpose of assistance under the scheme is to provide concessional loans to sole traders, partnerships, proprietary companies and trusts carrying on primary production enterprises to assist the entities to meet working capital expenses.

(2)For subsection (1), working capital expenses include, for example, the following—

(a)paying employee wages;

(b)paying creditors;

(c)paying rent and rates;

(d)buying goods, including fuel, for carrying on the business.

(3)However, for subsection (1), the following are not working capital expenses—

(a)refinancing existing business loans or equipment finance;

(b)buying new equipment or other assets.

3Definitions for schedule

In this schedule—

primary producer means—

(a)a sole trader who spends the majority of the person’s labour on, and derives the majority of the person’s income from, a primary production enterprise; or

(b)in relation to a partnership, proprietary company or trust that carries on a primary production enterprise, any partner in the partnership, shareholder in the company or beneficiary of the trust who spends the majority of their labour on, and derives the majority of their income from, the primary production enterprise.

primary production enterprise means a business—

(a)that involves primary production, including the agricultural, apicultural, aquacultural, forestry, grazing and horticultural industries; and

(b)for which an entity holds an Australian Business Number.

resilience plan, for a primary production enterprise, see section 4.

scheme means the scheme set out in this schedule.

4Meaning of resilience plan

A resilience plan, for a primary production enterprise, is a plan that the authority is satisfied—

(a)addresses risks relevant to the primary production enterprise, including—

(i)viability risks; and

(ii)productivity risks; and

(iii)business and climate risks, such as drought; and

(b)details the actions the applicant may take to manage the risks relevant to the primary production enterprise to improve the resilience of the primary production enterprise; and

(c)complies with the guidelines for resilience plans under the scheme that are issued by the authority.

Note—

A copy of the guidelines for resilience plans under the scheme may be obtained from the authority.

Part 2 General provisions of scheme

5Nature of assistance

The nature of the assistance that may be given to an applicant under the scheme is a loan at a concessional rate of interest to be used to pay for a purpose mentioned in section 2.

6Maximum loan amount

(1)The maximum amount of a loan, or total outstanding loan balance, under the scheme is $250,000.

(2)However, if the applicant applies for assistance under the scheme and the scheme set out in schedule 5, the maximum amount of the loans an applicant may receive under both schemes is a combined total of $250,000.

7Eligibility criteria

(1)To be eligible to receive assistance under the scheme the applicant must demonstrate to the authority that—

(a)the assistance is for a primary production enterprise carried on by a sole trader, partnership, proprietary company or trust; and

(b)the applicant is the sole trader, partnership, proprietary company or trust that is carrying on the primary production enterprise; and

(c)an interested person for the primary production enterprise is a primary producer; and

(d)the applicant—

(i)has taken reasonable precautions to minimise the effect of drought on the primary production enterprise; and

Example of reasonable precautions—

maintaining stock at levels commensurate with seasonal conditions

(ii)intends to use any of the primary production enterprise’s surplus liquid reserves or normal credit sources up to normal credit limits, in conjunction with the loan, to continue operations; and

(iii)can service the loan; and

(e)the primary production enterprise—

(i)has been carried on for at least 12 months before the day the application for assistance is made; and

(ii)demonstrates prospects for commercial viability; and

(iii)requires financial assistance because the primary production enterprise has been significantly financially affected by drought.

(2)Also, an applicant must give to the authority, or demonstrate to the authority that the applicant intends to give to the authority, a resilience plan for the primary production enterprise.

(3)However, an applicant is not eligible to receive assistance under the scheme if—

(a)the applicant has received assistance under the scheme and the loan has not been discharged; or

(b)the applicant has received assistance under the scheme in the 5 years before the day the application for assistance is made; or

(c)the applicant or an interested person for the primary production enterprise—

(i)has given to the department, in support of an application for DRAS funding, an invoice issued in the 6 months before the day the application for assistance is made; and

(ii)has received DRAS funding for the invoice.

(4)In this section—

DRAS funding means—

(a)a freight subsidy under the program known as the Drought Relief Assistance Scheme administered by the department; or

(b)a rebate known as the Emergency Water Infrastructure Rebate under the program known as the Drought Relief Assistance Scheme administered by the department.

interested person, for a primary production enterprise, means—

(a)if the primary production enterprise is carried on by a sole trader—the sole trader; or

(b)if the primary production enterprise is carried on by a partnership, proprietary company or trust—a partner in the partnership, a shareholder in the company or a beneficiary of the trust.

8Interest rates

(1)The interest charged on a loan given under the scheme must be calculated at a concessional interest rate decided by the authority.

(2)The authority may include a condition varying the interest rate during the term of the loan.

9Security

A loan under the scheme must be secured to the satisfaction of the authority.

10Terms of repayment

(1)The term of a loan under the scheme is the term decided by the authority up to a maximum of 10 years.

(2)During the first 2 years of the loan term, the applicant must make the interest repayments decided by the authority.

(3)From the start of the third year of the loan term, the applicant must make the principal and interest repayments decided by the authority.

11Condition

(1)The payment of assistance under the scheme is subject to the condition stated in this section.

(2)If an applicant’s application for assistance is not accompanied by a resilience plan for the primary production enterprise the subject of the application, the applicant must, if requested by the authority, give a resilience plan for the primary production enterprise to the authority.

12Requirements for applications

(1)An application for assistance under the scheme must—

(a)be made on the authority’s application form; and

(b)be accompanied by the documents stated on the application form; and

(c)be given to the authority.

(2)If the authority asks the applicant to provide further information to support the application, the applicant must provide the information.

13Deciding applications

(1)The authority must consider, and decide to approve or refuse to approve, each application for assistance under the scheme that complies with section 12(1).

(2)The authority must consider applications in the order they are received by the authority.

(3)The authority must refuse an application for assistance if the authority’s assistance funds for the scheme are not enough to pay for the assistance.

14Review by authority

Assistance given to an applicant under the scheme may be subject to an annual review by the authority.

Schedule 5 Emergency drought assistance loan scheme

section 3(1)

Part 1 Preliminary

1Objective of scheme

The objective of the scheme is to assist sole traders, partnerships, proprietary companies and trusts, that are carrying on primary production enterprises that have been significantly financially affected by drought, with carry-on finance.

2Purpose of assistance

(1)The purpose of assistance under the scheme is to provide interest-free loans to sole traders, partnerships, proprietary companies and trusts that are carrying on primary production enterprises to assist the entities to meet working capital expenses.

(2)For subsection (1), working capital expenses include, for example, the following—

(a)paying employee wages;

(b)paying creditors;

(c)paying rent and rates;

(d)buying goods, including fuel, for carrying on the business.

(3)However, for subsection (1), the following are not working capital expenses—

(a)refinancing existing business loans or equipment finance;

(b)buying new equipment or other assets.

3Definitions for schedule

In this schedule—

primary producer means—

(a)a sole trader who spends the majority of the person’s labour on, and derives the majority of the person’s income from, a primary production enterprise; or

(b)in relation to a partnership, proprietary company or trust that carries on a primary production enterprise, any partner in the partnership, shareholder in the company or beneficiary of the trust who spends the majority of their labour on, and derives the majority of their income from, the primary production enterprise.

primary production enterprise means a business—

(a)that involves primary production, including the agricultural, apicultural, aquacultural, forestry, grazing and horticultural industries; and

(b)for which an entity holds an Australian Business Number.

resilience plan, for a primary production enterprise, see section 4.

scheme means the scheme set out in this schedule.

4Meaning of resilience plan

A resilience plan, for a primary production enterprise, is a plan that the authority is satisfied—

(a)addresses risks relevant to the primary production enterprise, including—

(i)viability risks; and

(ii)productivity risks; and

(iii)business and climate risks, such as drought; and

(b)details the actions the applicant may take to manage the risks relevant to the primary production enterprise to improve the resilience of the primary production enterprise; and

(c)complies with the guidelines for resilience plans under the scheme that are issued by the authority.

Note—

A copy of the guidelines for resilience plans under the scheme may be obtained from the authority.

Part 2 General provisions of scheme

5Nature of assistance

The nature of the assistance that may be given to an applicant under the scheme is an interest-free loan to be used to pay for a purpose mentioned in section 2.

6Maximum loan amount

(1)The maximum amount of a loan, or total outstanding loan balance, under the scheme is $50,000.

(2)However, if the applicant applies for assistance under the scheme and the scheme set out in schedule 4, the maximum amount of the loans an applicant may receive under both schemes is a combined total of $250,000.

7Eligibility criteria

(1)To be eligible to receive assistance under the scheme the applicant must demonstrate to the authority that—

(a)the assistance is for a primary production enterprise carried on by a sole trader, partnership, proprietary company or trust; and

(b)the applicant is the sole trader, partnership, proprietary company or trust that is carrying on the primary production enterprise; and

(c)an interested person for the primary production enterprise is a primary producer; and

(d)the applicant—

(i)has taken reasonable precautions to minimise the effect of drought on the primary production enterprise; and

Example of reasonable precautions—

maintaining stock at levels commensurate with seasonal conditions

(ii)intends to use any of the primary production enterprise’s surplus liquid reserves or normal credit sources up to normal credit limits, in conjunction with the loan, to continue operations; and

(iii)can service the loan; and

(e)the primary production enterprise—

(i)has been carried on for at least 12 months before the day the application for assistance is made; and

(ii)demonstrates prospects for commercial viability; and

(iii)requires financial assistance because the primary production enterprise has been significantly financially affected by drought.

(2)Also, an applicant must give to the authority, or demonstrate to the authority that the applicant intends to give to the authority, a resilience plan for the primary production enterprise.

(3)However, an applicant is not eligible to receive assistance under the scheme if—

(a)the applicant has received assistance under the scheme and the loan has not been discharged; or

(b)the applicant has received assistance under the scheme in the 5 years before the day the application for assistance is made; or

(c)the applicant or an interested person for the primary production enterprise—

(i)has given to the department, in support of an application for DRAS funding, an invoice issued in the 6 months before the day the application for assistance is made; and

(ii)has received DRAS funding for the invoice.

(4)In this section—

DRAS funding means—

(a)a freight subsidy under the program known as the Drought Relief Assistance Scheme administered by the department; or

(b)a rebate known as the Emergency Water Infrastructure Rebate under the program known as the Drought Relief Assistance Scheme administered by the department.

interested person, for a primary production enterprise, means—

(a)if the primary production enterprise is carried on by a sole trader—the sole trader; or

(b)if the primary production enterprise is carried on by a partnership, proprietary company or trust—a partner in the partnership, a shareholder in the company or a beneficiary of the trust.

8Security

A loan under the scheme must be secured to the satisfaction of the authority.

9Terms of repayment

(1)The term of a loan under the scheme is the term decided by the authority up to a maximum of 7 years.

(2)During the first 2 years of the loan term, the authority must defer repayments of the principal.

(3)From the start of the third year of the loan term, the applicant must make the principal repayments decided by the authority.

10Condition

(1)The payment of assistance under the scheme is subject to the condition stated in this section.

(2)If an applicant’s application for assistance is not accompanied by a resilience plan for the primary production enterprise the subject of the application, the applicant must, if requested by the authority, give a resilience plan for the primary production enterprise to the authority.

11Requirements for applications

(1)An application for assistance under the scheme must—

(a)be made on the authority’s application form; and

(b)be accompanied by the documents stated on the application form; and

(c)be given to the authority.

(2)If the authority asks the applicant to provide further information to support the application, the applicant must provide the information.

12Deciding applications

(1)The authority must consider, and decide to approve or refuse to approve, each application for assistance under the scheme that complies with section 11(1).

(2)The authority must consider applications in the order they are received by the authority.

(3)The authority must refuse an application for assistance if the authority’s assistance funds for the scheme are not enough to pay for the assistance.

13Review by authority

Assistance given to an applicant under the scheme may be subject to an annual review by the authority.

6Amendment of sch 39 (Drought preparedness grant scheme)

(1)Schedule 39, section 7(2)(a)—
omit, insert—

(a)the applicant or an interested person for the primary production enterprise—

(i)has given to the department, in support of an application for DRAS funding, an invoice issued in the 6 months before the day the application for assistance is made; and

(ii)has received DRAS funding for the invoice; or

(2)Schedule 39, section 7(3)—
insert—

DRAS funding means—

(a)a freight subsidy under the program known as the Drought Relief Assistance Scheme administered by the department; or

(b)a rebate known as the Emergency Water Infrastructure Rebate under the program known as the Drought Relief Assistance Scheme administered by the department.

7Insertion of new sch 40

After schedule 39—
insert—

Schedule 40 Drought ready and recovery finance loan scheme

section 3(1)

Part 1 Preliminary

1Objective of scheme

The objective of the scheme is to assist sole traders, partnerships, companies and trusts carrying on primary production enterprises to undertake projects or activities to improve the resilience to drought of the primary production enterprises.

2Purpose of assistance

The purpose of assistance under the scheme is to assist sole traders, partnerships, companies and trusts carrying on primary production enterprises to pay for eligible projects or eligible recovery activities.

3Definitions for schedule

In this schedule—

eligible project see section 4.

eligible recovery activity see section 5.

primary producer means—

(a)a sole trader who—

(i)spends the majority of the person’s labour on a primary production enterprise; and

(ii)either—

(A)derives the majority of the person’s income from the primary production enterprise; or

(B)in the opinion of the authority, based on the demonstrated production potential of the primary production enterprise, will eventually derive the majority of the person’s income from the primary production enterprise; or

(b)a partnership, proprietary company or trust that carries on a primary production enterprise for which the partners, shareholders or beneficiaries—

(i)spend the majority of their labour on a primary production enterprise; and

(ii)either—

(A)derive the majority of their income from the primary production enterprise; or

(B)in the opinion of the authority, based on the demonstrated production potential of the primary production enterprise, will eventually derive the majority of their income from the primary production enterprise.

primary production enterprise means a business—

(a)that involves primary production, including the agricultural, apicultural, aquacultural, forestry, grazing and horticultural industries; and

(b)for which an entity holds an Australian Business Number.

resilience plan, for a primary production enterprise, see section 6.

scheme means the scheme set out in this schedule.

4Meaning of eligible project

An eligible project is a project the authority is satisfied—

(a)will involve the purchase and installation of new permanent capital infrastructure; and

(b)will improve the ability of a primary production enterprise to prepare for, continue to operate in, or recover from, drought conditions; and

(c)will not commence before the authority approves assistance under the scheme for the project.

Examples of eligible projects—

•purchase and installation of new pipes, water tanks or water troughs

•construction of a new dam

•installation of more efficient irrigation

•drilling of a new bore

•construction of a new feed store

5Meaning of eligible recovery activity

(1)An eligible recovery activity is an activity the authority is satisfied—

(a)is replanting, preparing the land for replanting, or restocking; and

(b)will improve the ability of a primary production enterprise to recover from drought conditions; and

(c)will not commence before the authority approves assistance under the scheme for the activity.

(2)In this section—

replanting includes—

(a)removing unviable crops, plants or trees; and

(b)purchasing and planting new seed, seedlings or trees; and

(c)purchasing a chemical, fertiliser or soil ameliorant to plant the new seed, seedlings or trees; and

(d)purchasing consumables for the equipment required to plant the new seed, seedlings or trees.

restocking includes—

(a)purchasing and vaccinating new stock; and

(b)drenching new stock.

6Meaning of resilience plan

A resilience plan, for a primary production enterprise, is a plan that the authority is satisfied—

(a)addresses risks relevant to the primary production enterprise, including—

(i)viability risks; and

(ii)productivity risks; and

(iii)business and climate risks, such as drought; and

(b)details the actions the applicant may take to manage the risks relevant to the primary production enterprise to improve the resilience of the primary production enterprise; and

(c)complies with the guidelines for resilience plans under the scheme that are issued by the authority.

Note—

A copy of the guidelines for resilience plans under the scheme may be obtained from the authority.

Part 2 General provisions of scheme

7Nature of assistance

(1)The nature of the assistance that may be given to an applicant under the scheme is a loan at a concessional rate of interest to be used to pay for the cost of an eligible project or eligible recovery activity, up to the maximum amount of a loan, or total outstanding loan balance, under the scheme.

(2)In this section—

cost, of an eligible project, includes—

(a)charges for freight associated with the eligible project; and

(b)expenses for consumables, including fuel, associated with the eligible project; and

(c)charges for installation associated with the eligible project.

8Maximum loan amount

The maximum amount of a loan, or total outstanding loan balance, under the scheme is $250,000.

9Eligibility criteria

(1)An applicant is eligible to receive assistance under the scheme if the authority is satisfied—

(a)the assistance is for a primary production enterprise carried on by a sole trader, partnership, proprietary company or trust; and

(b)the applicant is the sole trader, partnership, proprietary company or trust that is carrying on the primary production enterprise; and

(c)an interested person for the primary production enterprise is a primary producer; and

(d)the applicant has given a resilience plan to the authority for the applicant’s primary production enterprise; and

(e)the applicant has identified in the resilience plan an eligible project or eligible recovery activity to be completed with the assistance provided under the scheme; and

(f)the applicant can service the loan; and

(g)the applicant’s primary production enterprise is commercially viable or demonstrates sound prospects for commercial viability.

(2)However, the applicant is not eligible to receive assistance under the scheme if—

(a)the applicant or an interested person for the primary production enterprise has given to the department, in support of an application for DRAS funding, an invoice issued in the 6 months before the day the application for assistance is made; and

(b)the applicant or the interested person received DRAS funding for the invoice.

(3)In this section—

DRAS funding means—

(a)a freight subsidy under the program known as the Drought Relief Assistance Scheme administered by the department; or

(b)a rebate known as the Emergency Water Infrastructure Rebate under the program known as the Drought Relief Assistance Scheme administered by the department.

interested person, for a primary production enterprise, means—

(a)if the primary production enterprise is carried on by a sole trader—the sole trader; or

(b)if the primary production enterprise is carried on by a partnership, proprietary company or trust—a partner in the partnership, a shareholder in the company or a beneficiary of the trust.

10Interest rates

(1)The interest charged on a loan given under the scheme must be calculated at a concessional interest rate decided by the authority.

(2)The authority may include a condition varying the interest rate during the term of the loan.

11Security

A loan under the scheme must be secured to the satisfaction of the authority.

12Terms of repayment

(1)The term of a loan under the scheme is the term decided by the authority up to a maximum of 10 years.

(2)During the first 2 years of the loan term, the applicant must make the interest repayments decided by the authority.

(3)From the start of the third year of the loan term, the applicant must make the principal and interest repayments decided by the authority.

13Condition

(1)The payment of assistance under the scheme is subject to the condition stated in this section.

(2)If requested by the authority, the applicant must give to the authority a report about how the assistance is enabling the person to achieve outcomes consistent with the purpose of the assistance mentioned in section 2.

14Requirements for applications

(1)An application for assistance under the scheme must—

(a)be made on the authority’s application form; and

(b)be accompanied by the documents stated on the application form; and

(c)be given to the authority.

(2)If the authority asks the applicant to provide further information to support the application, the applicant must provide the information.

15Deciding applications

(1)The authority must consider, and decide to approve or refuse to approve, each application for assistance under the scheme that complies with section 14(1).

(2)The authority must consider applications in the order they are received by the authority.

(3)The authority must refuse an application for assistance if the authority’s assistance funds for the scheme are not enough to pay for the assistance.

16Review by authority

Assistance given to an applicant under the scheme may be subject to an annual review by the authority.